Reserves & Resources Update

Net 2P Reserves increased by 86%

Company 2P Net Present Value of US$ 445 Million increased by 195%

Eland Oil & Gas plc (AIM: ELA), an oil & gas development and exploration company operating in West Africa with a principal focus on Nigeria, is today pleased to announce the results of a reserves and resources evaluation provided by Netherland, Sewell & Associates Inc. ("NSAI") as at 30 June 2013 (collectively, the "NSAI Report" or the "Report").

The results of the NSAI Report, details of which are set out below, demonstrate a material increase in the quantum and value to Eland of the reserves and resources of OML 40 as at 30 June 2013 as compared with the previous independent report with an effective date of 30 June 2012. As opposed to the previous independent report, the NSAI Report provides reserves and values on a net entitlement basis by taking account of financing arrangements.

Highlights:

§ Gross 2P STOIIP of 307.4MMB, an increase of 35%

§ Gross OML 40 Reserves

§ Proved ("1P") of 38. 2 million barrels ("MMB"), an increase of 99%

§ Proved plus Probable ("2P") of 81.8 MMB, an increase of 14%

§ Proved plus Probable plus Possible ("3P") of 105.4 MMB, a decrease of 10%

§ Eland Net Entitlement Reserves (after royalties)

§ 1P of 13.8 MMB, an increase of 307%

§ 2P of 23.5 MMB, an increase of 86%

§ 3P of 27.1 MMB, an increase of 32%

§ Eland's Net (Entitlement) Present Value at 10%

§ 1P of US$ 303 million. US$ 400 million with financing arrangement, an increase of 656%

§ 2P of US$ 407 million. US$ 445 million with financing arrangement, an increase of 195%

§ 3P of US$ 436 million. US$ 473 million with financing arrangement, an increase of 87%

§ Gross OML 40 Contingent Resources

§ 1C of 18.4 MMB, an increase of 60%

§ 2C of 45.3 MMB, an increase of 192%

§ 3C of 138.6 MMB, an increase of 493%

Les Blair, Chief Executive Officer of Eland, said: 

"The complete data set for OML 40, in particular the 3D seismic data, was only made available to Eland after closing of the purchase transaction with Shell on 31 August 2012.

This new and updated CPR, provided by Netherlands Sewell & Associates Inc., now includes this and other data provided by Shell following deal closure.

NSAI have included the value to Eland of the unique financing carry arrangement in place with our partner on OML 40 and the CPR results also demonstrate the base value of the asset and its very substantial exploration upside.

The CPR details a significant STOOIP increase and with the planned long term work programme there will be further increases in reserves and value for shareholders through the conversion of contingent and prospective resources into reserves. Eland believes that higher recovery rates closer to 50%, in line with regional data, may be applicable to the discovered fields in OML 40.

There is also scope for significant further increases in the contingent and prospective resources on OML 40 from further technical evaluation where historical drilling success rates achieved by Shell, using 2D seismic, exceeded 80%.

OML 40 is truly a world class asset with multiple development, appraisal and low risk exploration targets."

For further information:

Eland Oil & Gas PLC (+44 (0) 207 016 3180)

Les Blair, CEO

George Maxwell, CFO

Edward Cozens, IR

Canaccord Genuity Limited (+44 (0) 207 523 8000)

Henry Fitzgerald-O'Connor

Peter Stewart

FirstEnergy Capital LLP (+44 (0) 207 448 0200)

Majid Shafiq

Khalid Ahmed

Citigate Dewe Rogerson (+44 (0) 207 638 9571)

Martin Jackson

Jack Rich

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Gilles Krijger, Msc of Delft University, with 35 years of experience in the oil and gas sector, is a Reservoir Engineer and member of the Society of Petroleum Engineers who meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.

In compiling the Report, NSAI has used the definitions and guidelines as set forth in the 2007 Petroleum Resources Management System ('PRMS') approved by the Society of Petroleum Engineers (SPE).

SUMMARY OF OIL RESERVES AS AT 30 JUNE, 2013

SUMMARY OF CONTINGENT AND PROSPECTIVE OIL RESOURCES:

GROSS LEASE CONTINGENT RESOURCE

§ 1C OF 18.4 MMB, AN INCREASE OF 60%

§ 2C OF 45.3 MMB, AN INCREASE OF 192%

§ 3C OF 138.6 MMB, AN INCREASE OF 493%

SUMMARY OF UNRISKED GROSS CONTINGENT RESOURCES AS AT 30 JUNE, 2013

Note:

1. Based on current market conditions in Nigeria, neither contingent resources nor values have been attributed to gas or natural gas liquid volumes. However, the Company has rights to monetise gas volumes and is currently discussing and assessing the market potential for development

2. Columns may not add due to rounding.

GROSS LEASE PROSPECTIVE RESOURCE (UNRISKED)

§ LOW ESTIMATE OF 50.5 MMB, AN INCREASE OF 856%

§ BEST ESTIMATE OF 119.5 MMB, AN INCREASE OF 339%

§ HIGH ESTIMATE OF 238.5 MMB, AN INCREASE OF 78%

SUMMARY OF UNRISKED GROSS PROSPECTIVE RESOURCES AS AT 30 JUNE, 2013

Note:

1. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be economically viable or technically feasible to produce any portion of the resources.

2. Columns may not add due to rounding.

RECATEGORISATION OF RESOURCES

Upon admission to AIM, in September 2012, the only OML 40 Resources data available to the Company was that obtained from the Shell Information Memorandum where they carried an exploration portfolio of 15 prospects with a total MSV(Mean Success Volume) prospective resource of 356 MMbbl which included oil and condensate.

Using the 3D seismic data acquired since admission, NSAI have now certified 45.3MMB in the 2C Unrisked Gross Contingent Resources category and 119.5MMB in the Unrisked Gross Prospective Resources.

There are a number of leads evaluated by Shell which we have yet to have certified that equate to 151MMBBL of Shell original 356MMBBL.

Through continued technical work and further 3D seismic acquisition we will to be able to bring more of these leads into our Resources category in future.

PRICING ASSUMPTIONS

The report was prepared using a base Brent oil price of US$101.50 per barrel and is adjusted for a regional price differential where Nigerian crudes typically trade at a premium to Brent.

GLOSSARY